In calculating the net cash provided by or used in operations using the indirect method,which of the following items would be subtracted from net income?
A) A decrease in Prepaid Rent
B) An increase in Accounts Receivable
C) An increase in long-lived assets
D) An increase in Salaries and Wages Payable

Question

Quizplus · Accepted Answer

An increase in Accounts Receivable is subtracted from net income because it represents revenue that has been recognized but not yet collected in cash, thus reducing cash flow from operating activities.

In Calculating the Net Cash Provided by or Used in Operations